Noda achieves main goal but more hurdles loom

Upper House passes bill to hike sales levy

Prime Minister Yoshihiko Noda achieved a major goal Friday when the Upper House passed his administration’s social security and tax reform bills that will double the sales tax to 10 percent by 2015.

Noda has staked his political career on the unpopular plan to increase the consumption tax.

Friday’s passage of the three bills came a day after Noda easily survived a no-confidence motion with the support of the two major opposition parties after promising to dissolve the Lower House for a snap election “soon.” He didn’t elaborate on the timing.

“I hope to win the public’s understanding over the importance of securing stable funding for social security services while restoring Japan’s financial health,” Noda said at an evening news conference.

The legislation’s passage was briefly placed in doubt earlier this week when the Liberal Democratic Party, the largest opposition group, threatened to submit its own no-confidence motion and a censure motion to both chambers of the Diet unless Noda gave assurances on dissolving the House of Representatives. The threat was issued even though the LDP agreed in June with opposition ally New Komeito and Noda’s ruling Democratic Party of Japan to ensure the bills cleared the legislature.

But Noda managed to persuade LDP President Sadakazu Tanigaki to drop the threat Wednesday night by vowing to dissolve the lower chamber in the near future and call an election. In the end, the DPJ voted down the binding no-confidence motion Thursday while the LDP and New Komeito effectively abstained from the vote.

Now that the bills have cleared both chambers, lawmakers in the political hub of Nagata-cho are speculating over when Noda is planning to hold a snap election. The DPJ wants to avoid a swift vote because the support rate for Noda’s Cabinet has tumbled to critical levels. A Mainichi Shimbun poll in July said the rate had fallen to 23 percent.

At the news conference, Noda deflected questions on what dissolving the House of Representatives “soon” means exactly. “It’s not appropriate (at this stage) to clearly give a date,” he said.

Meanwhile, the LDP said Noda should call a general election before the current Diet session expires Sept. 8.

But political observers say a vote could take place after the session ends, possibly in autumn at the earliest. This is partly because a bill to correct the current vote-value disparity in Lower House elections must be passed during the current session, and the DPJ and other parties have yet to reach an agreement on the details.

Last year, the Supreme Court ruled that the current electoral system is in a “state of unconstitutionality” because of the vote disparities observed in some districts in the 2009 general election. Tanigaki told reporters Wednesday that “the vote disparity issue has to be fixed” before Noda dissolves the Lower House.

“We have to immediately correct the vote-value disparities by trimming the number of Lower House seats, and comprehensively reforming the electoral system,” Noda said Friday evening.

In addition, the prime minister is desperate to pass a special bill to issue deficit-covering bonds in the divided Diet, where opposition parties control the Upper House, to cover about 40 percent of the budget for fiscal 2012.

However, the LDP and New Komeito have so far refused to support the legislation. Its prospects of passing during the current session are therefore unclear.

“If we abandon the bond bill, implementing the budget will become progressively more difficult. We have to enact the legislation as quickly as possible so people’s livelihoods and the economy won’t be affected by a prolonged delay,” Noda told the news conference.

Koichi Nakano, a political science professor at Sophia University in Tokyo, said that even though the reform bills have cleared the Diet, Noda still has to overcome these two major obstacles. The key question is whether the prime minister can pass the bond bill while preventing more DPJ members from quitting the party, Nakano said.

Meanwhile, this week’s DPJ-LDP confrontation not only clarified Noda’s continuing challenges but also those facing the LDP, the professor said.

Tanigaki’s flip-flopping on cooperating over the bills amid pressure from party colleagues who wanted him to take a harder line showed he is incapable of controlling the party, according to the professor. “What was revealed during the drama was that Tanigaki lacks leadership.” Nakano said.

In the end, Tanigaki supported Noda but seven LDP lawmakers sided with the no-confidence motion even though party members were explicitly instructed to abstain from voting. They included Shinjiro Koizumi, whose father, Junichiro, was one of Japan’s most popular prime ministers.

Tanigaki and Noda both face party presidential elections in September, but this week’s turmoil could especially work against Tanigaki’s re-election bid, Nakano observed.

Still, Noda, who saw some 50 lawmakers leave his party due to their opposition to the sales tax hike, may also face competition in his bid to stay at the helm of the DPJ.

Former farm minister Masahiko Yamada, who voted against the reform bills in the Lower House last month, said after a lower chamber plenary session Thursday evening that he “wants to change the DPJ” by nominating one of his allies as a candidate for its presidency.

The DPJ confirmed Wednesday it will hold its presidential poll Sept. 21.

Nakano observed that it is still possible Noda will remain in charge even though he is largely responsible for the DPJ defections, because no strong rival candidates remain in the party.

DPJ policy chief Seiji Maehara or Vice Prime Minister Katsuya Okada would not be considered fresh enough contenders to succeed Noda, but even if the prime minister continues to lead the party, he “won’t be able to repair the cracks within it,” Nakano said.